5th Circuit Court of Appeals Upholds FCC “Shot Clock” Provisions

As part of the Telecommunications Act of 1996 (TCA), Congress amended the Communications Act of 1934 by adding Section 332(c)(7). That provision, codified as 47 U.S.C. § 332(c)(7) (titled “Preservation of local zoning authority”), restricts the authority of state and local governments with respect to decisions regarding the placement and construction of wireless communications facilities. The purported object was to promote the interest in encouraging the rapid development of new telecommunications technologies by removing the ability of state and local governments to impede the construction and modification of wireless communications facilities through delay or irrational decision-making. In 2008, CTIA—The Wireless Association filed a petition for a declaratory ruling with the FCC for clarification of this provision, including the time periods within which a state or locality had to act on wireless facility siting applications, after which an application was deemed to be granted. In 2009, the FCC issued the Declaratory Ruling, in which it granted in part and denied in part CTIA’s petition. This established “a reasonable period of time” for purposes of § 332(c)(7)(B)(ii) presumptively as 90 days for personal wireless service facility siting applications requesting collocations and 150 days for all other applications. A lack of decision within these time frames would constitute a failure to act, but the FCC rejected the CTIA’s “deemed granted” approach.

Several organizations subsequently filed a petition for reconsideration, and, while that was pending, the City of Arlington filed a petition for review (in which the City of San Antonio intervened) with the federal court (namely, this action). After the FCC issued its Reconsideration Order, the City of San Antonio filed its own petition seeking review of both the Declaratory Ruling and the Reconsideration Order. These petitions, in general, claimed that (1) the FCC lacked statutory authority to establish the 90- and 150-day time frames; (2) the FCC’s 90- and 150-day time frames conflicted with the language of § 332(c)(7)(B)(ii) and (v); (3) the FCC’s actions were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law; and (4) the FCC violated the Administrative Procedure Act (APA) because its establishment of the 90- and 150-day time frames constituted a “rulemaking” subject to the APA’s notice and comment requirements. Each City also raised individual arguments.

The Fifth Circuit denied Arlington’s petition for review on the merits, and dismissed San Antonio’s petition for review because it ruled it lacked jurisdiction to consider it. Pursuant to 47 U.S.C. § 402(a), a party seeking review of a reviewable final order was required to file a petition for review of the order within 60 days after entry of the order. San Antonio did not file its petition until October 1, 2010, well beyond the expiration of the 60-day period associated with the Declaratory Ruling, but argued that it petition was timely because it was filed within 60 days of the FCC’s later issuance of the Reconsideration Order. San Antonio’s failure to petition for reconsideration of the Declaratory Ruling rendered the Declaratory Ruling a final agency decision with respect to San Antonio both for purposes of conferring jurisdiction on the court, and for purposes of triggering the 60-day time period. Although San Antonio’s petition for review was timely insofar as it also challenged the Reconsideration Order, the Reconsideration Order was “not a reviewable order.” (It contained no new or additional determinations.) Further, San Antonio could not rely on its timely intervention with respect to another party’s petition for review to raise matters outside the scope of the other party’s petition.

On the merits, in brief, the Fifth Circuit held that (1) any failure by the FCC to comply with the APA in this case was a “plainly harmless” error, with no indication that any failure to comply with the APA’s notice-and-comment procedures prejudiced Arlington or the intervenors. (2) The FCC’s procedures were adequate to satisfy due process. (3) On whether the FCC lacked the statutory authority to administer § 332(c)(7)(B)(ii) and (v) by adopting the 90- and 150-day time frames, the U.S. Supreme Court had not yet conclusively resolved the question of whether Chevron applied in the context of an agency’s determination of its own statutory jurisdiction. The Fifth Circuit opted to use the Chevron framework in answering this issue in concluding that the FCC was entitled to deference with respect to its exercise of authority to implement § 332(c)(7)(B)(ii) and (v); the FCC had the authority to establish the time frames; and that the time-frames themselves also passed muster under Chevron. “[W]e believe the cities’ challenges to the reasonableness of the 90-and 150-day time frames stem from a misunderstanding of the time frames’ effect on the wireless zoning application process. We do not read the Declaratory Ruling as creating a scheme in which a state or local government’s failure to meet the FCC’s time frames constitutes a per se violation of § 332(c)(7)(B)(ii).” (4) The FCC’s conclusion was not arbitrary and capricious.

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